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The Trade Trio Talking Tough With Tokyo

September 26, 1993

Government

THE TRADE TRIO TALKING TOUGH WITH TOKYO

Question: How many trade mechanics does it take to squeeze concessions out of Japan? The answer: It better not be more than three.

That's how many nuts-and-bolts negotiators from the U.S. Trade Representative's office will be in the trenches for Washington when the U.S. and Japan square off in Hawaii on Sept. 19 for a new round of market-opening talks. Arrayed against them will be an army of experts on America from Japan's fabled Ministry of International Trade & Industry--hundreds of trade wonks who pore over piles of documents in search of some minute advantage.

The lonely trio of Japan specialists from the USTR--Charlene Barshevsky, Ira Wolf, and Charles Lake--will be working hand in hand with allies and experts from many federal agencies, all of whom have a daunting assignment. Under the banner of "results-oriented trade," the Clinton Administration has staked much on the outcome of the Hawaii talks. The sessions are aimed at hammering out a framework that can gain measurable market access for the U.S. in 12 specific sectors of Japan's shuttered economy.

But whatever the Americans might lack in numerical strength, they make up for in fortitude and firepower. Is Barshevsky worried by the odds? "Not at all," insists the 43-year-old Deputy U.S. Trade Representative. "The Japanese are capable, smart, and tough. We are too."

That bravado will soon be put to the test. Up till now, most jousting in the trade wars has been between political leaders. Now the work of translating the pols' promises into concrete agreements is falling to the bureaucrats. Although Japanologists from the Commerce, State, and Treasury Depts. will also be on hand, the job of monitoring the outcome of the talks to make sure it conforms to U.S. law will be handled by the USTR. And viewed as a group, the USTR's Tokyo Trio isn't exactly chopped fugu. Together, these experts claim some 23 years of living in Japan and intimate knowledge of its customs and mores.

--THE HAMMER. Every Administration, it seems, needs a tough-talking negotiator who can bedevil the opposition with legal jujitsu. Former U.S. Trade Representative Carla Hills played that role for President Bush. In the Japan talks, the job goes to the brassy Barshevsky. With nearly two decades of experience as a Washington international-trade lawyer with Steptoe & Johnson, she has watched many a trade concession from Tokyo get stymied by opposition from MITI. Barshevsky is determined to put more heat on MITI to avoid seeing the same fate befall Clinton's trade initiative.

In July, she angered the Japanese--and earned the moniker "Stonewall"--when she demanded that MITI stop its foot-dragging on the "framework" talks agreed to by Tokyo's Foreign Ministry. "Charlene is one smart, tough lady," says Alan Holmer, former USTR deputy in the Reagan Administration.

Under the framework agreement, Barshevsky has been given the authority to negotiate deals in a key area: expanding Japanese government procurement of U.S. high-technology products and communications gear.

The Administration has told the government of Prime Minister Morihiro Hosokawa that it expects quantifiable progress in the sectoral talks by January. "The Japanese understand our expectations here, and the timetable we are following," says Barshevsky with typical bluntness. "And yes, we will respond in kind if our expectations are not met."

Tough talk. But there are problems. The framework hammered out between President Clinton and lame-duck Japanese Prime Minister Kiichi Miyazawa at the Tokyo economic summit is maddeningly vague. For example, it calls for a "highly significant" decrease in Japan's current-account surplus, now running at 4% of gross domestic product, without defining what "significant" means. What's more, while the new Hosokawa government has pledged more cooperation in opening markets, Tokyo's entrenched trade bureaucrats are continuing to

resist.

--THE GRAY EMINENCE. The institutional memory of the U.S. Trade Representative's Japan cadre is 48-year-old Ira Wolf, a Bush holdover with an encyclopedic grasp of Japanese trade. A former Tokyo-based representative for Motorola Inc., he heads the USTR's Japan desk. Wolf's brusque manner belies a razor-sharp wit, and he is the official with whom the Clintonites constantly touch base to gain historical perspective on trade talks.

While he loves all things Japanese and is a collector of Japanese art and furniture, Wolf doesn't buy the notion that Japan these days is moving closer to Western-style business practices. He believes that only an aggressive U.S. push will work against the ingrained fabric of Japan's trade barriers. "Pressure definitely works with the Japanese," he says.

--THE SECRET WEAPON. Assisting Wolf is Charles Lake, the USTR's deputy director of Japanese affairs and something of a cross-cultural wunderkind. Lake's mother is Japanese, and he grew up in Tokyo, where he served as a legislative aide in the Diet.

Negotiations are always conducted through interpreters to avoid misunderstandings, so Lake won't need his flawless Japanese at the bargaining table. But his command of the language regularly startles the Japanese bureaucrats and business leaders who visit the USTR's office. "The Japanese are not used to American officials speaking like a native," says Lake.

Lake's assignment in the framework talks will be to lead negotiations on opening the Japanese insurance market to U.S. companies. He is also the house expert on efforts to sell more U.S. computers to Japan. Both tasks are impressive, given Lake's age--31. Lake "knows how Japan really runs," says Erin En-dean, former head of Japanese affairs under Carla Hills.

Good as they may be, however, it's hard to find anyone in the ranks of business who doesn't think that the Tokyo Trio could use a platoon of reinforcements. "We have entered a time when we may need lifelong Japan- or Europe-watchers, like the old Sovietologists," says Wolf. "Outside the State Dept., we've never developed that [expertise] in government." But with federal budgets as tight as they are nowadays, for the time being Barshevsky, Wolf, and Lake will have to soldier on alone--three stealthy samurai against a battalion of Tokyo's best.Douglas Harbrecht in Washington